Would you believe me if I said 50% of divorces are the result of money problems. Financial crises have led to millions of conflicts, wars, and turmoil. Money can make or break your socio-economic status, and it can certainly define your lifestyle. It’s no secret that money problems are often the most challenging, stressful, and emotionally exhausting predicaments that we face in our adult lives.
Although the dollar bill is probably one of the most influential pieces of paper that exists, money does not define your happiness. The following tips will not only help to place you on a more secure pathway to the future, but taking control of your finances and making wise choices with your money will certainly reduce the stress that is so often associated with this facet of life.
First and foremost, it is imperative to evaluate your income, necessary expenses, and current debts. Knowing your monthly operational costs with a detailed budget can instantly reveal if you are living within your reasonable means.
Secondly, it’s not all about living paycheck to paycheck. Even if your income is enough to cover your spending habits, that leaves little room for unexpected problems or unanticipated expenses, let alone indulgences like travel and holiday shopping. Typically, it is suggested that folks adjust their spending so that they are living on less than 80% of their income, leaving at least 20% for savings and investments.
Start small by dedicating a set amount from each paycheck to an emergency fund. Financial experts suggest that having $1,000 tucked away is necessary for things like car repairs, accidents, or other sudden financial obligations. A tremendous weight can be lifted off your shoulders if you can eventually create a savings account with at least 6-8 months of your monthly expenses. In the event of a job loss or debilitating accident, these funds can save you from falling into a bottomless pit of debt.
Buying on credit almost always ends up costing more in the long run due to excessive interest charges. If you can postpone larger purchases and save up the cash in the interim, you will spend far less money overall.
Speaking of cash, many folks report success by using the envelop system for spending. Each month, withdraw a certain amount of cash for regular expenses like food, fuel, and fun money. When funds are more tangible, people tend to have a more conservative approach to spending.
If you’re currently paying off a hefty loan, contribute a little extra each month to the principal so you can pay off the debt quicker, and reduce the total amount spent to interest, so getting a bigger loan to pay off all the little ones is a better option, and with services as Loans Now online, this is possible and a better option for your financial status.
Another way to eliminate financial stress is to set up monthly bill payments on an automatic system. This way you won’t have to worry about missing a payment or incurring those outrageous late fees.
Certain service providers, for example, the power company, may offer flat rate fees to neutralize seasonal highs and lows. Instead of paying low rates in the winter and high rates in the summer, consumers have the same, predictable bill each month. Although it is definitely a personal preference, knowing exactly what your expenses will be helps to eliminate any unexpected changes.
Finally, the secret to eliminating the majority of financial stress is nothing more than a mindset. We’re a society surrounded by convenience and luxuries, and it only takes a few photographs of impoverished nations and third world countries to remind you of your numerous blessings. It is a daily choice to be grateful for what you have, and those who take a step back and embrace just how lucky they truly are tend to have an entirely different view of their financial assets and the meaning of the word necessity.